As they prepare for holiday reading in Tuscany, City bankers are buying up rare copies of an obscure book on the mechanics of Weimar inflation published in 1974.
NEW YORK (MarketWatch) -- The U.S. dollar advanced versus the euro and other major currencies on Wednesday as investors awaited congressional testimony later in the session by U.S. Federal Reserve Chairman Ben Bernanke.
Jim Grant spoke with Bloomberg Television about the new Federal Reserve Board of Governors nominees and the future decisions of the Fed.
* 0:30 The first order of business will likely be to print enough dollars to make something happen in the U.S. economy.
* 1:30 Janet Yellen is likely to be a consensus member, and vote with the Fed on every decision.
* 2:00 Peter Diamond and Sarah Bloom Raskin are not formidable thinkers about the nature of money, and are unlikely to propose solutions to the fact that the U.S. dollar is a faith based currency that is of no intrinsic value that is manipulated by the Fed.
Midway through 2010 we are approaching the end of the end-game, the resolution of the monetary imbalances that began in 1971. For more than 2500 years, gold was money: but, in 1971 that changed. After 1971, money was no longer connected to gold. For the first time in history, money had no intrinsic value.
After the Bretton Woods Agreement in 1945 until 1971, the world’s currencies were anchored to the US dollar which was convertible to gold. Thus, directly or indirectly, all currencies could be exchanged for gold; but on August 15, 1971 the US cut the ties between the US dollar and gold; and all currencies became fiat.
In a recent article, we showed you how silver had become systematically de-monetised by governments over the past 150 years or so. These actions have seen the gold/silver ratio move from its long term historical average of around 15:1 to 66:1 today. In other words, one ounce of gold is now equivalent to 66 ounces of silver.
Today, we’ll show you why silver could potentially be one of the cheapest assets in the world right now. The silver market is not at all analysed by mainstream investors and for this reason remains very much overlooked as an investment opportunity.
Goldfinger, the villain of the eponymous James Bond film, hatched a plot to increase the value of his bullion by detonating a nuclear device inside Fort Knox, making America's gold supply radioactive for 60 years. No less exciting, though rather more unsettling, is the real-life drama taking place on the world's financial markets, where investors have piled into gold on fears that capitalism is about to crumble.
As a result, the gold price has soared to record levels, rising 9% this year to reach a peak of $1,264.90 (£834.44) an ounce, with influential names in the world of finance predicting it could top $2,000. Among them is Jim Rogers, the investment guru who called the start of the commodities rally in 1999.
Central banks have resumed their diversification away from the U.S. dollar, cutting the percentage of reserve assets held in dollars, as shown by the dark blue line in the chart below. Thing is, when this happened previously, the euro served as the dollar's replacement.
Is it just a coincidence that Portugal has (or had) 382 tonnes of gold in reserve and that the amount of gold the Bank for International Settlements recently inventoried via a swap arrangement was 380 tonnes?
Let's put 2+2+2+2+2 together here. (Nothing in the gold market is ever simply 2+2.)
I don't know how many of you watch the "Pawn Stars" on the History Channel, but if you don't, let me introduce you to the key question asked of anyone who brings something into the store:
There is too much leverage in the non-physical gold market, according to Ben Davies, CEO of Hinde Capital. Davies considers the outlook for the price of gold.
One of the hottest feuds in economics today is the one between Harvard Professor Niall Ferguson and Nobel Laureate Paul Krugman. The debate represents austerity vs. stimulus, with Krugman, of course, arguing that the U.S. needs to do way more to save the economy.
Ferguson notes that his dispute with Krugman isn't even so much about economics -- it's about history. Ferguson is a history professor. And history says pretty clearly that countries with this level of sovereign debt eventually go bust.
Since 2000, Greek unit labour costs have risen by almost 40pc. Meanwhile, German unit labour costs have barely risen. This loss of competitiveness by the southern countries is central to their current poor economic performance and their lack of viable prospects for the future.
If governments are obliged to cut back and consumers and/or companies are lumbered with excessive debts, it is to exports that these countries must look for salvation. For the eurozone as a whole to achieve prosperity and economic success, accompanied by stability and sustainability, will require the solution of both these problems. But are they simultaneously soluble within the current financial framework?
Jean-Claude Trichet, head of the European Central Bank, last week cited this Wirtschaftswunder as evidence of durable recovery in Europe. It is no such thing. The OECD's leading indicators for June rolled over in Italy and France, as well as China and India.
The IMF expects Spain's economy to contract by 0.4pc this year. It has lowered its forecast for the eurozone from 1.5pc to 1.3pc in 2011. "Downside risks to the recovery have risen sharply," it said.
The euro reached an eight-week high of $1.27 against the U.S. dollar on Friday, continuing its turnaround rally that has seen the currency rise 7% after hitting a four-year low in June.
Harvard professor Niall Ferguson isn't as "sanguine" as the market. "Between sovereign debt and banks Europe is still in deep, deep in trouble," he tells Tech Ticker's guest host Joe Weisenthal. "I'm not feeling too confident about Greece. I feel pretty nervous about the banks and the stress tests," he says.
On 21 June gold broke out to new all-time highs above $1,260 an ounce. It pulled back, but then on 28 June it moved briefly above $1,260 again. Ten days later it was down some $80, flirting with the $1,185 mark. That's quite a correction and it's concerned a lot of people, so I wanted to address it in today's Money Morning.
Is this anything more than a "healthy pull-back"? Let's have a look...
After a tearing run, gold and 10-year treasury notes are off their highs over the past week, as investors regain an appetite for risk that has cooled demand for the traditional safe havens.
There is evidence to support allegations that the price of silver has been manipulated and suppressed by the large US bullion banks, says precious metals analyst David Levenstein, of Lakeshore Trading.
Economist Paul Krugman recently launched a powerful volley in the debate over the best path to growth following the Great Recession -- and dropped the "d" word to do it.
"We are now, I fear, in the early stages of a third depression," the Nobel Prize winner wrote in his June 27 New York Times column, referring to previous U.S. depressions that started in 1873 and 1929. "And this third depression will be primarily a failure of policy."
Niall Ferguson succinctly captures the risks of a sovereign debt crisis in America. These kind of crises lull you to sleep until confidence suddenly collapses. Ferguson explains that with the debt load we currently carry in America, our margin of safety is very thin. A slight increase in interest rates results in a asymmetric increase in interest payments.
July
28
July
The Death of Paper Money
Jul 28 2010 The Telegraph
As they prepare for holiday reading in Tuscany, City bankers are buying up rare copies of an obscure book on the mechanics of Weimar inflation published in 1974.
Continue Reading
28
July
Gold Down But Not Out: Market Pro
Jul 28 2010 CNBC
"Gold is world's currency of first resort"
Continue Reading
21
July
Dollar mostly higher ahead of Bernanke
Jul 21 2010 MarketWatch
NEW YORK (MarketWatch) -- The U.S. dollar advanced versus the euro and other major currencies on Wednesday as investors awaited congressional testimony later in the session by U.S. Federal Reserve Chairman Ben Bernanke.
Continue Reading
15
July
Jim Grant: We're Still Going To Be Stuck With The Same Faith Based Currency
Jul 15 2010 The Business Insider
Jim Grant spoke with Bloomberg Television about the new Federal Reserve Board of Governors nominees and the future decisions of the Fed.
* 0:30 The first order of business will likely be to print enough dollars to make something happen in the U.S. economy.
* 1:30 Janet Yellen is likely to be a consensus member, and vote with the Fed on every decision.
* 2:00 Peter Diamond and Sarah Bloom Raskin are not formidable thinkers about the nature of money, and are unlikely to propose solutions to the fact that the U.S. dollar is a faith based currency that is of no intrinsic value that is manipulated by the Fed.
Continue Reading
15
July
The End Game and the Illusory Gold Bubble
Jul 15 2010 GoldSeek
Midway through 2010 we are approaching the end of the end-game, the resolution of the monetary imbalances that began in 1971. For more than 2500 years, gold was money: but, in 1971 that changed. After 1971, money was no longer connected to gold. For the first time in history, money had no intrinsic value.
After the Bretton Woods Agreement in 1945 until 1971, the world’s currencies were anchored to the US dollar which was convertible to gold. Thus, directly or indirectly, all currencies could be exchanged for gold; but on August 15, 1971 the US cut the ties between the US dollar and gold; and all currencies became fiat.
Continue Reading
15
July
Silver – The Early Stages of Re-monetisation?
Jul 15 2010 Money Morning
In a recent article, we showed you how silver had become systematically de-monetised by governments over the past 150 years or so. These actions have seen the gold/silver ratio move from its long term historical average of around 15:1 to 66:1 today. In other words, one ounce of gold is now equivalent to 66 ounces of silver.
Today, we’ll show you why silver could potentially be one of the cheapest assets in the world right now. The silver market is not at all analysed by mainstream investors and for this reason remains very much overlooked as an investment opportunity.
Continue Reading
14
July
Gold keeps rising as prudent investors look for security
Jul 14 2010 The Guardian UK
Goldfinger, the villain of the eponymous James Bond film, hatched a plot to increase the value of his bullion by detonating a nuclear device inside Fort Knox, making America's gold supply radioactive for 60 years. No less exciting, though rather more unsettling, is the real-life drama taking place on the world's financial markets, where investors have piled into gold on fears that capitalism is about to crumble.
As a result, the gold price has soared to record levels, rising 9% this year to reach a peak of $1,264.90 (£834.44) an ounce, with influential names in the world of finance predicting it could top $2,000. Among them is Jim Rogers, the investment guru who called the start of the commodities rally in 1999.
Continue Reading
14
July
Morgan Stanley: Central Banks Have Begun Ditching The Dollar Again...
Jul 14 2010 The Business Insider
Central banks have resumed their diversification away from the U.S. dollar, cutting the percentage of reserve assets held in dollars, as shown by the dark blue line in the chart below. Thing is, when this happened previously, the euro served as the dollar's replacement.
Continue Reading
13
July
BIS gold swap signifies a threat to Europe, not to gold
Jul 13 2010 GoldSeek
Is it just a coincidence that Portugal has (or had) 382 tonnes of gold in reserve and that the amount of gold the Bank for International Settlements recently inventoried via a swap arrangement was 380 tonnes?
Let's put 2+2+2+2+2 together here. (Nothing in the gold market is ever simply 2+2.)
I don't know how many of you watch the "Pawn Stars" on the History Channel, but if you don't, let me introduce you to the key question asked of anyone who brings something into the store:
Do you want to "pawn it" or "sell it"?
Continue Reading
13
July
Potential Gold Bubble Forming? [CNBC Video]
Jul 13 2010 GoldSeek
There is too much leverage in the non-physical gold market, according to Ben Davies, CEO of Hinde Capital. Davies considers the outlook for the price of gold.
Continue Reading
13
July
Niall Ferguson: Paul Krugman's Advice Will Lead Us Down A Road To Ruin
Jul 13 2010 Yahoo News
One of the hottest feuds in economics today is the one between Harvard Professor Niall Ferguson and Nobel Laureate Paul Krugman. The debate represents austerity vs. stimulus, with Krugman, of course, arguing that the U.S. needs to do way more to save the economy.
Ferguson notes that his dispute with Krugman isn't even so much about economics -- it's about history. Ferguson is a history professor. And history says pretty clearly that countries with this level of sovereign debt eventually go bust.
Continue Reading
13
July
PIIGS may yet fly, but not while they're trapped in this rickety eurozone
Jul 13 2010 The Telegraph
Since 2000, Greek unit labour costs have risen by almost 40pc. Meanwhile, German unit labour costs have barely risen. This loss of competitiveness by the southern countries is central to their current poor economic performance and their lack of viable prospects for the future.
If governments are obliged to cut back and consumers and/or companies are lumbered with excessive debts, it is to exports that these countries must look for salvation. For the eurozone as a whole to achieve prosperity and economic success, accompanied by stability and sustainability, will require the solution of both these problems. But are they simultaneously soluble within the current financial framework?
Continue Reading
13
July
Deutschland über alles does not mean a trickledown recovery in EMU
Jul 13 2010 The Telegraph
Jean-Claude Trichet, head of the European Central Bank, last week cited this Wirtschaftswunder as evidence of durable recovery in Europe. It is no such thing. The OECD's leading indicators for June rolled over in Italy and France, as well as China and India.
The IMF expects Spain's economy to contract by 0.4pc this year. It has lowered its forecast for the eurozone from 1.5pc to 1.3pc in 2011. "Downside risks to the recovery have risen sharply," it said.
Continue Reading
13
July
Greece in "Death Spiral;" Europe Still in Deep, Deep Trouble, Says Niall Ferguson
Jul 13 2010 Yahoo News
The euro reached an eight-week high of $1.27 against the U.S. dollar on Friday, continuing its turnaround rally that has seen the currency rise 7% after hitting a four-year low in June.
Harvard professor Niall Ferguson isn't as "sanguine" as the market. "Between sovereign debt and banks Europe is still in deep, deep in trouble," he tells Tech Ticker's guest host Joe Weisenthal. "I'm not feeling too confident about Greece. I feel pretty nervous about the banks and the stress tests," he says.
Continue Reading
12
July
Will economic austerity kill gold's bull market?
Jul 12 2010 MoneyWeek
On 21 June gold broke out to new all-time highs above $1,260 an ounce. It pulled back, but then on 28 June it moved briefly above $1,260 again. Ten days later it was down some $80, flirting with the $1,185 mark. That's quite a correction and it's concerned a lot of people, so I wanted to address it in today's Money Morning. Is this anything more than a "healthy pull-back"? Let's have a look...
Continue Reading
12
July
Gold Trumps Treasuries, Says Poll
Jul 12 2010 The Street
After a tearing run, gold and 10-year treasury notes are off their highs over the past week, as investors regain an appetite for risk that has cooled demand for the traditional safe havens.
Continue Reading
12
July
National Inflation Association on Sport Stars Salaries and Inflation
Jul 12 2010 National Inflation Association
NIA's President discusses Lebron James and what effect inflation will have on his NBA salary.
Continue Reading
12
July
Silver 'robbed of its lustre'
Jul 12 2010 Times Live
There is evidence to support allegations that the price of silver has been manipulated and suppressed by the large US bullion banks, says precious metals analyst David Levenstein, of Lakeshore Trading.
Continue Reading
9
July
Depression, double-dip and deficits: Economists speak out
Jul 09 2010 CNN
Economist Paul Krugman recently launched a powerful volley in the debate over the best path to growth following the Great Recession -- and dropped the "d" word to do it.
"We are now, I fear, in the early stages of a third depression," the Nobel Prize winner wrote in his June 27 New York Times column, referring to previous U.S. depressions that started in 1873 and 1929. "And this third depression will be primarily a failure of policy."
Continue Reading
9
July
Niall Ferguson: U.S. Treasuries are the Pearl Harbor of Safe Havens
Jul 09 2010 Investing Contrarian
Niall Ferguson succinctly captures the risks of a sovereign debt crisis in America. These kind of crises lull you to sleep until confidence suddenly collapses. Ferguson explains that with the debt load we currently carry in America, our margin of safety is very thin. A slight increase in interest rates results in a asymmetric increase in interest payments.
Continue Reading